Globalization and employment

Résumé de l'exposé

Globalization is one of the most controversial topics in today's world. Globalization raises fears and apprehensions and the most prominent one that stands out is the growing power of multinational firms that bestows them with the right to retract jobs whenever and wherever they want. Globalization is regarded as one of the main causes of the increasing level of unemployment in Europe and in some other developed countries. In the 1990's, though the economists have depicted that only a small part of unemployment was due to globalization, the general population has not been able to gauge what the real reason could be. Globalization can also be described as the increase in the opportunity for business activities. Firstly, it depicts high growth in international trade (mainly goods and services but capital flows towards quite a few countries encourages foreign investments). Secondly it shows acceleration in information circulation and in technological progress.

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Sommaire de l'exposé

Globalization and unemployment : the quantitative effects of globalization on employment

The idea of a disloyal competition of third-worlds countries

Some factors tend to compensate the unemployment created through delocalizations and globalization

The destabilizing effects of globalization on the notion of employment

The need for flexibility

Worker migrations

Development and inequalities

Extraits de l'exposé

[...] The destabilizing effects of globalization on the notion of employment 3 main destabilizing effects. The need for flexibility Globalization is a process impossible to stop, one needs to adapt to this phenomenon and adapt to a more and more global environment, especially about employment environment. Trying to escape globalization may lead to a lack of technology relatively to other countries because firms do not have the same need of technological progress to remain competitive if the state protects them to resist globalization. [...]

[...] Nevertheless trade is not the only factor determining this lack of convergence (cf. Solow model and its limits). Conclusion It is true that globalization has created some unemployment in developed countries but it has had a rather small effect and does not explain much of the European unemployment today. There has also been a change in the notions of employment and job. There are both positive and negative aspects of globalization, the positive side being the creation of jobs through trade, the negative one being inequalities and the problems linked to adaptation. [...]

[...] It implies first a high growth in international trade (goods, services but also capital flows towards a higher variety of countries and more and more money is invested abroad). It also implies some worker migrations and an acceleration in information circulation and in technological progress. As a result, we are more and more living in a unique and global economy. It is a new wave of globalization, previous waves : end of 15th century and discovery of the American continent, gold, ; 2nd wave : beginning of the 20th century. For example imports and exports flows of the US were as important as today in 1913. [...]

[...] Development and inequalities Opponents to globalization often say that this process raises many inequalities but depending from the tools you use and the definition of inequality you give, results vary a lot. First globalization raise internal inequalities within a country, that means there is a growing gap of revenue and buying power between the richest part and the poorest part of the population, the rich get richer and the poor get poorer. For example this effect is particularly strong in the US. Now there is an inequality of employment : revenue, type of jobs, or even absence of jobs. [...]

[...] Globalization has a strong impact on the economy, especially on employment, but what is this impact in more details? I. Globalization and unemployment : the quantitative effects of globalization on employment Existence of 2 theses about these effects. The idea of a disloyal competition of third-worlds countries As a matter of fact, labor costs are much lower in developing countries, it is their main competitive advantage and source of attractiveness. That's mainly because of lower labor costs that western enterprises delocalize in those countries, then imports will replace domestic production in developed countries. [...]